India Services Sector Growth Slows
Analysis based on 11 articles · First reported Jan 06, 2026 · Last updated Jan 06, 2026
The slowdown in India's services sector growth and composite PMI indicates a moderation in economic momentum, which could lead to a more cautious outlook for investors. Weakening business confidence and stalled hiring activity suggest potential headwinds for corporate earnings and employment, despite benign inflation and resilient exports.
India's services sector experienced a significant slowdown in December, with the HSBC India Services Purchasing Managers' Index (PMI) falling to an 11-month low of 58.0. This moderation was driven by softer growth in new business, intensified competition, and a halt in hiring activity, ending a 42-month streak of job creation. Business confidence also declined for the third consecutive month, reaching its lowest level in over three years. The broader HSBC India Composite PMI, which includes manufacturing, also fell to an 11-month low of 57.8, indicating a widespread cooling across the private sector. While export orders showed some resilience and inflation remained benign, the overall data suggests a more measured growth phase for India's economy heading into the new year.
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